Jeff Schmid, president of the Kansas City Fed, said Sunday that inflation remains “uncomfortably” above the 2% price-stability target and is moving in the wrong direction. He did not call for an additional rate increase but said the Federal Reserve has the tools and responsibility to contain inflationary pressure by influencing demand. The Fed raised rates by 25 basis points in September to 3.75%-4.00% before holding them steady after inflation data came in stronger than expected. Boston Fed President Susan Collins backed a steady pace of modest rate increases while estimating that the policy-rate path over the next year could be higher than previously expected because of persistent inflation and a strengthening labor market.
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